Visa Direct Aims to Replace Paper Checks in Healthcare Payouts

Three out of four healthcare payouts still go out by check. That means delays, fraud risk, and no real-time confirmation for patients or providers. Visa Direct is pushing into that gap.

Edward Galvin, vice president of Visa Commercial Solutions NA, told PYMNTS that checks carry no native validation layer. "One of the key fraud areas is just in directing funds to the wrong account," he said. A card-based push ties to a debit card and bank account with instant verification. The check does not.

Why does paper persist? "People are familiar with checks," Galvin said. "The providers are familiar with checks. And it's easy to get the checks out there versus correcting where the inefficiencies are on the system." Inertia and regulation like HIPAA reinforce the habit, supported by a fragmented ecosystem of insurers and providers. No single entity owns the problem, so no one is fully accountable for fixing it.

The hidden costs are large. Delays force patients to wait days or weeks for money owed. Customer service teams handle status inquiries. Fraud exposure grows when a check sits in the mail. Galvin called this "a massive cost that's not recognized and not seen today."

Visa sees an opening. CFOs want to quantify the friction – speed, fraud reduction, data accuracy, customer experience. The clearest near-term use cases are flexible spending accounts (FSAs) and health savings accounts (HSAs). These are high-volume, lower-dollar disbursements where the payment method matters less than the speed. They are ideal testing grounds for real-time models.

Today about 12% of healthcare payouts move in real time. That figure is expected to reach roughly 33% within three years, according to PYMNTS Intelligence research conducted with Visa Direct's support. Better. Still not good enough. The risk for Visa is that adoption stalls – that ecosystem inertia outlasts the push. The reward is a multi-billion-dollar payout stream that currently leaks value through paper.

Galvin said he sees a convergence where CFO pressure and patient expectations are finally aligned with technology capability. "It's really the various players in the ecosystem coming together to support getting there," he said.

The challenge: healthcare is not a solo act. Every insurer, provider and regulator must coordinate. That takes time. Visa Direct has the infrastructure. Whether the industry moves fast enough is the open question.

PYMNTS CEO Karen Webster moderated the conversation. She noted that consumers expect real-time, especially when a reimbursement check in transit affects someone's ability to cover an expense. "It's still processing" is no longer acceptable.

Visa's push into healthcare payouts mirrors its broader real-time strategy. The company is also bringing click-to-pay to Revolut users in Europe Visa Click to Pay Goes Live for Revolut Users in Europe, one example of how it wants to be the network for instant money movement across verticals.

For Visa, the healthcare payout market is a multi-billion-dollar opportunity still dominated by paper. The check's shelf life may be limited.